Definition Mobile payments refer to the process of making financial transactions using a mobile device, such as a smartphone or tablet. This modern payment method allows consumers and businesses to conduct transactions without the need for physical cash or credit cards. The convenience, speed and improved security features of mobile payments have led to their increasing adoption in various sectors.
Components of Mobile Payments Mobile Wallets: Digital wallets store credit/debit card information and allow users to make transactions through their mobile devices.
Definition Open Banking refers to a financial services model that allows banks and other financial institutions to share customer data with third-party providers through secure Application Programming Interfaces (APIs). This collaboration fosters innovation and enables consumers to access a wider range of financial products and services tailored to their needs.
Components of Open Banking APIs (Application Programming Interfaces): These are essential for enabling secure data sharing between financial institutions and third-party providers.
Definition P2P (Peer-to-Peer) Lending is a method of borrowing and lending money directly between individuals, facilitated by online platforms, without the need for traditional banking intermediaries. This innovative form of financing provides a marketplace where borrowers can request loans from multiple lenders, who can choose to fund all or part of those loans.
Components of P2P Lending The P2P lending landscape includes several critical components:
Borrowers: Individuals seeking funds for personal or business use.
Definition Regulatory Technology (RegTech) refers to the innovative use of technology to improve and streamline compliance processes in the financial sector. It incorporates tools designed to monitor, report and ensure adherence to rules and regulations while minimizing operational costs and complexity associated with compliance tasks. RegTech represents an intersection of finance, technology and regulatory affairs, addressing the growing demand for regulatory compliance, especially with evolving regulations and market complexities.
Definition Robo Advisors are automated investment platforms that provide portfolio management and financial planning services using algorithms and artificial intelligence, with limited human interaction. The primary function of Robo Advisors is to create and manage diversified investment portfolios based on the investor’s goals, risk tolerance and time horizon.
Components of Robo Advisors Algorithmic Portfolio Management: Robo Advisors employ algorithms to automatically manage, rebalance and optimize investment portfolios based on market conditions.
Definition Smart Contracts are self-executing contracts where the terms of the agreement or conditions are directly written into lines of code. They reside on a blockchain network and automatically execute or enforce the agreement once predetermined conditions are met. This can include transferring assets, issuing payments or updating records—all without the need for an intermediary, resulting in increased efficiency and reduced fraud risk.
Components of Smart Contracts Code Base: Smart contracts are constructed using specific programming languages suited for blockchain technologies, such as Solidity for Ethereum.
Definition Stablecoins are a type of cryptocurrency designed to minimize price volatility by being pegged to a stable asset, such as a fiat currency (e.g., USD) or a commodity (e.g., gold). Unlike traditional cryptocurrencies like Bitcoin or Ethereum, which can experience significant price swings, stablecoins aim to provide the benefits of digital assets—such as fast transactions and low fees—without the extreme fluctuations in value.
Importance of Stablecoins Stablecoins play a crucial role in the cryptocurrency ecosystem by providing a reliable medium of exchange, store of value, and unit of account.